Khader Khan Sahib vs Doraiswami Chettiar

N.S. Ramaswami, J.—The plaintiff in the suit is the appellant before us. The question that arises in this Letters Patent Appeal is whether the

plaintiff is entitled to be compensated by the first defendant u/s 70 of the Contract Act. The suit property originally belonged to one Rahmat Bee.

She had mortgaged the same to one Abdul Azeez under the deed dated 5-7-1946. One Perumal Udayar, a simple money creditor of Rahamat

Bee as well as her husband obtained a decree in O. S.No.520 of 1952 on the file of the court of the District Munsif, Namakkal and brought the

suit property to sale subject to the above said mortgage in favour of Abdul Azeez. In the court auction sale held the first defendant in the present

suit, out of which this Letters Patent Appeal arises, purchased the property subject to the mortgage in favour of Abdul Azeez dated 5-7-1946. The

said Abdul Azeez brought a suit on his mortgage in O. S. No.315 of 1958 on the file of the Court of the District Munsif, Namakkal, impleading the

first defendant herein also as a party defendant, he having purchased the equity of redemption in the court sale in pursuance of the money decree in

O. S.520 of 1952. The defendants 2 to 4 in the present suit, are the children of Rahmat Bee, the original owner of the property and they as well as

their father had also been impleaded a party defendants in the mortgage suit filed by Abdul Azeez. By the time the said mortgage suit was filed, an

appeal by the judgment-debtor in the money decree (O. S. No.520 of 1952) had been allowed and the money decree in pursuance of which the

first defendant had purchased the property in court auction had been set aside. The plaintiff in the abovesaid money suit (O. S.No.520 of 1952)

had filed a second appeal to this court in S. A. 605 of 1958 and that came to be allowed eventually on 4-2-1961. But the position when the

mortgage suit was filed by Abdul Azeez was, that the decree in the money suit stood set aside. Though the first defendant herein had taken

possession of the property in pursuance of the court sale in execution of the abovesaid money decree and he was vitally interested in redeeming the

earlier mortgage in favour of Abdul Azeez, he remained ex parte in the mortgage suit brought by the said Abdul Azeez. It would appear that the

first defendant thought that by the money decree having been set aside, on appeal by the judgment-debtors in O. S. No. 520 of 1952, the court

sale in his (first defendant''s) favour would become ineffective.

The mortgage suit by Abdul Azeez (O. S. No.315 of 1958) was decreed on 30-9-1958. There was an execution proceeding in pursuance of

the mortgage decree. The court sale, in pursuance of the abovesaid mortgage suit, was avoided by the plaintiff herein (appellant before us)

advancing a sum of Rs.3,000 on a mortgage of the same property executed by defendants 2 to 4 herein. The consideration for the mortgage is

Rs.3,000 and the entire sum had gone in discharge of the mortgage of Abdul Azeez.

In the present suit on the mortgage for Rs. 3,000 executed by defendants 2 to 4 (Ex. A-1 dated 30-9-1959), the plaintiff impleaded the first

defendant and claimed relief against him also in respect of the said sum of Rs. 3,000. The plaintiff relied on Section 69 as well as Section 70 of the

Indian Contract Act in order to get relief against the first defendant. The trial court refused to accept the case of the plaintiff as against the first

defendant and dismissed the suit as far as he was concerned. On appeal by the plaintiff, the first appellate court allowing the appeal granted a

decree in favour of the plaintiff as against the first defendant also. Against that, the first defendant filed S. A. No. 1869 of 1964 on the file of this

court and Alagiriswami J. has allowed the second appeal holding that the plaintiff cannot get relief as against the first defendant either by virtue or

Section 69 or by virtue of Section 70 of the Indian Contract Act.

In the present appeal, under the Letters Patent, filed by the plaintiff, the contention of Mr. M. Srinivasan, learned counsel on his behalf is that

Section 70 of the Contract Act is applicable to the facts of this case and the plaintiff is entitled to a decree as against the first defendant. Section 70

of the Contract Act is in the following terms-

Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person

enjoys the benefit thereof the latter is bound to make compensation to the former in respect of or to restore, the thing so done or delivered.

As pointed out by the Supreme Court in Mulamchand Vs. State of Madhya Pradesh, for invoking Section 70 of the Indian Contract Act, the first

condition is that a person should lawfully do something for another person or deliver something to him; the second condition is that in doing the said

thing or delivering the said thing he must not intend to act gratuitously and the third condition is that the person for whom something is done or to

whom something is delivered must enjoy the benefit thereof. The question is whether in the present case, these conditions are satisfied, for, if they

are satisfied, the first defendant is liable to make compensation to the plaintiff.

In the present case, what has happened is that even though the equity or redemption had been sold away in the court auction held in pursuance

of the decree in O. S. No.520 of 1952 and the first defendant herein as auction purchaser thereof had become the owner of the equity of

redemption, Abdul Azeez, the mortgagee, in his suit on the mortgage impleaded not only the purchaser (the first defendant herein) but also the legal

representatives of the original mortgagor and the mortgage decree was against all of them. Under the said mortgage decree, not only the first

defendant herein (who was the sixth defendant in the mortgage suit) but also defendants 2 to 4 herein who were also party defendants in the said

mortgage suit became entitled to redeem the mortgage. As already seen, by the time the mortgage suit was filed by Abdul Azeez, the money

decree in O. S. No. 520 of 1952 had been set aside on appeal, and the parties seem to have proceeded on the impression that the court auction

sale in favour of the first defendant herein which was in pursuance of the money decree was of no avail. That is how the first defendant who was

really interested in redeeming the property of the earlier mortgage in favour of Abdul Azeez (subject to which the court auction in his favour was

held) remained ex parte in the mortgage suit and did nothing when execution was levied by Abdul Azeez in pursuance of the mortgage decree; and

defendants 2 to 4 were trying to save the property from being sold in court auction. There is no dispute that the plaintiff herein (appellant before us)

paid a sum of Rs. 3,000 which admittedly went in discharge of the mortgage decree. But for such discharge of the mortgage decree, the property

was liable to be sold in court auction and the first defendant herein would certainly have been damnified. Now as the mortgage decree has been

discharged the first defendant is able to enjoy the property free of the encumbrance. It is to be noted that under the court sale in his favour, he

purchased the property only subject to the earlier mortgage in favour of Abdul Azeez and further Abdul Azeez obtained a mortgage decree

impleading not only the legal representatives of the original mortgagor but also the first defendant herein. Undoubtedly, the first defendant who is

entitled to the property as the court auction purchaser in pursuance of the decree in O. S. No.520 of 1952 and who is in possession of the same,

has been benefited by the payment of Rs. 3,000 by the plaintiff which went in discharge of the mortgage decree of Abdul Azeez, for, the first

defendant gets the property free of the encumbrances even though it was he who was bound to discharge the same. It is in this background of

facts, one has to see whether the conditions of Section 70 of the Contract Act are satisfied or not.

The learned Judge who heard the second appeal has given two reasons for holding that the plaintiff is not entitled to relief against the first

defendant. One is that the plaintiff cannot be said to be a person interested in paying off the earlier mortgage and therefore he is not entitled to

redeem. It is to be noted that for the purpose of invoking Section 70 of the Contract Act, the plaintiff need not have any interest in the payment of

the mortgage amount. It is only u/s 69 of the Contract Act, the question of a person being interested in the payment of the money which another is

bound to pay arises. We have already extracted the conditions which should be satisfied for the application of Section 70 of the Contract Act.

There is nothing in Section 70 which warrants the conclusion that the plaintiff should be a person interested in the payment if he is to get relief.

The learned Judge has not given a finding against the plaintiff in respect of conditions 2 and 3, namely, that doing the thing should not be

gratuitous and that the other person should enjoy the benefits thereof. In other words, the learned Judge has not found that the payment of Rs.

3,000 by the plaintiff was unauthorised or gratuitous or that the first defendant has not enjoyed the benefit of the payment as contemplated u/s 70

of the Contract Act. Even in respect of the first of the conditions namely, that a person should lawfully do something for another or deliver

something to him, the learned Judge has not found that what the plaintiff did in this case is not lawful within the meaning of S. 70. However, the

learned Judge has taken the view that as the plaintiff did not directly pay off the mortgage decree but only paid the sum of Rs. 3,000, to defendants

2 to 4 which enabled the latter to discharge the mortgage decree he is not entitled to relief. It is true that the plaintiff obtained a mortgage deed

from defendants 2 to 4 for the sum of Rs.3,000 and it was the latter (defendants 2 to 4) who actually paid off the earlier mortgage decree. But, can

it be said that the plaintiff did not do anything to the first defendant as contemplated u/s 70 of the Contract Act? The recitals in the mortgage dated

30-9-1959 executed by defendants 2 to 4 in favour of the plaintiff herein which is marked as Ex. A-1 in the case, go to show that a sum of Rs.

400 had been advanced by the plaintiff sometime prior to the execution of the mortgage for the specific purpose of paying towards the mortgage

decree and getting an adjournment of the impending court sale and that the balance namely Rs. 2,600 was paid on the date of the mortgage

specifically for discharging the mortgage decree. It is not in dispute that as a matter of fact the said sum of Rs. 400 was paid in partial discharge of

the mortgage decree, and that the sale was adjourned and that then the sum of Rupees 2,500 was paid in full discharge of the mortgage decree.

Even though the plaintiff did not personally pay the amount for discharging the said mortgage decree, it is quite obvious he did discharge the decree

through defendants 2 to 4. We are unable to agree with the view of the learned Judge that because the plaintiff did not personally discharge the

mortgage decree but he had done only through defendants 2 to 4, Section 70 of the Contract Act in not applicable.

Even though the learned Judge has not held that what the plaintiff did was not lawful as contemplated u/s 70 of the Contract Act, the learned

counsel for the first defendant-respondent contends so. In K.R.S.V. Muthayya Chetti and Others Vs. Narayanan Chetti and Others, it has been

held that the meaning of the word ''lawfully'' in Section 70 is merely ''bona fide''. In State of West Bengal Vs. B.K. Mondal and Sons, , it has been

pointed out that all that the word ''lawfully in Section 70 would, in the context, indicate is that after something is delivered or something is done by

one person for another and that thing is accepted and enjoyed by the latter, a lawful relationship is born between the two which under the

provisions of Section 70 gives rise to a claim for compensation. Therefore, in the present case, if the first defendant has accepted and enjoyed the

benefit of the payment of Rs. 3,000 towards the discharge of the earlier mortgage, what the plaintiff did would come within the term ''lawfully'' u/s

However, the learned counsel for the first defendant contends that it cannot be said that his client is a person who enjoyed the benefit of the

payment as contemplated u/s 70, because there is nothing to show that the first defendant voluntarily accepted the benefit. The learned counsel

relies on the observations of the Supreme Court in the above case at p. 897 which are as follows-

There is no doubt that the thing delivered or done must not be delivered or done fraudulently or dishonestly nor must it be delivered or done

gratuitously, Section 70 is not intended to entertain claim for compensation made by persons who officiously interfere with the affairs of another or

who impose on others services not desired by them. Section 70 deals with a case where a person does a thing for another not intending to act

gratuitously and the other enjoys it. It is thus clear that when a thing is delivered or done by one person to reject it. therefore the acceptance and

enjoyment of the thing delivered or done which is the basis for the claim for compensation u/s 70 must be voluntary.

The learned counsel placed reliance on the last sentence in the above passage and contended that in the present case there was no option of the

first defendant not to accept the benefit (of the payment of Rs. 3,000 in discharge of the mortgage decree) and therefore there is no voluntary

acceptance of the benefit. We are, however, unable to agree with this contention. As pointed out by the Supreme Court, in the above case

immediately after the passage quoted above, the requirement mentioned in the passage affords a sufficient and effective safeguard against spurious

claims based on unauthorised and spurious, the appellant could have easily refused to accept the said act and then the respondent would not have

been able to make a claim for compensation. It was in that context the above quoted observation had been made.

In K. Chengalroya Reddi Vs. Udai Kavour by her agent Mohanmull Choreda (deceased) and Others, a Bench of this court had to consider the

question whether under circumstances similar to the present case, there was voluntary acceptance of the benefit. That was a case where the

plaintiff owned certain rentfree villages situate in a zaimndari. Some of the defendants in the suit owned other villages in the zamindari. for arrears of

revenue all the villages were brought to sale by the Government. The plaintiff paid the money due to the Government and saved the villages from

being sold. The plaintiff claimed reimbursements from the owners of the other villages u/s 70 of the Contract Act. One of the contentions was, as

the plaintiff in that suit was herself the owner of some of the villages, the payment made by her to the Government was for her own benefit and

therefore, neither Section 69 nor Section 70 of the Contract Act would be applicable. The contention was repelled but we are not concerned with

that aspect at the moment. The further contention in that case was that the defendants who owned some of the other villages had no option either

to accept or reject the benefit of the plaintiff''s paying the money to the Government and therefore Section 70 has no application. In rejecting this

contention, at page 760, Varadachariar. J. observed-

Even if the question of option to accept the benefit of the Act be considered material, defendant 2 has undoubtedly accepted the benefit in this

case. As pointed out by Sankaran Nair J. in Raja of Pittapur v. Secretary of State, (1915) 25 Ind Cas 783 = AIR 1915 Mad 428 if a person uses

property which but for another''s act would not have existed or had been available to him, he consciously accepted the benefit of the other''s act

and must pay for it......... It is not defendant 2''s case that he does not want the property at the cost of paying the plaintiff the expenses incurred in

saving it.

This decision directly applies to the present case, for here also, but for the plaintiff''s act, the property itself would not have existed as it would have

been sold in court auction in pursuance of the mortgage decree obtained by Abdul Azeez. We are of the opinion that the observations in State of

West Bengal Vs. B.K. Mondal and Sons, relied on by the learned counsel for the first defendant do not in any way run counter to the above

passage.

Therefore we hold that u/s 70 of the Contract Act, the plaintiff is entitled to proceed against the first defendant.

The learned counsel for the plaintiff further contended that defendants 2 to 4 are persons interested in the payment as contemplated u/s 69 of

the Contract Act, in as much as the mortgage decree was against not only the first defendant but also against them, that by paying off the mortgage

decree, they are entitled to get reimbursement from the first defendant u/s 69 and that the plaintiff having made all of them parties in this suit, the

court would be justified in passing a decree in favour of the plaintiff as against the first defendant also. It is contended that in this way, Section 69 of

the Contract Act can also be relied on by the plaintiff. However, as we hold that the plaintiff is entitled to a decree against the first defendant by

virtue of Section 70 of the Contract Act, the further point argued by the learned counsel for the plaintiff need not be pursued.

The result is the Letters Patent Appeal is allowed and the decree of the first appellate court is restored. There will be no order as to costs.

Appeal allowed.